Shire Pharmaceutical’s decision last week to change tax residency to Ireland
is likely to be the first of many, according to an authoritative study.
Michael Devereux, the director at the centre, has released a paper
criticising the government’s proposals to crack down on foreign profits.
‘The government proposes to tax the worldwide “passive income” – interest,
royalties and dividends – of any multinational companies headquartered in the
UK. This goes far beyond the need to protect the UK tax base from profits being
shifted out of the UK,’ the paper says.
‘If these proposals were implemented, the Shire example could be the first of
many such relocations,’ it adds.
Devereux argues countries which tax the receipt of dividends received from
foreign subsidiaries, as the UK currently does, are less attractive locations
for headquarters. The foreign profits proposals will drop the practice for the
Another paper released by the Centre showed 6% of 200 companies surveyed had
changed their location due to the tax regime of the country where they were
Centre for Business Taxation, Oxford University
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